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Leveraged Loan-Fund Assets Drop to 14-Month Low in October as Outflows Persist

Amid falling interest rates and rate expectations, outflows from retail loan funds persisted for the seventh straight month in October. All told, loan mutual funds’ assets under management dropped by $5.9 billion – eclipsing September’s short-lived record decline of $5.6 billion – to a 14-month low of $152.2 billion, according to data from Lipper and fund filings. In all, loan-fund AUM contracted by $13.6 billion, or 8.2%, during the first 10 months of 2014. What’s more, AUM is off $22.9 billion, or 13.1%, since reaching an all-time high of $175.1 billion in March.

As this chart illustrates, however, 2014’s declines follow a period of hyper-growth for the category. Indeed, loan mutual fund AUM remains 659% higher than its post-credit-crunch low of $20.1 billion, from year-end 2008, and far above the pre-crisis high of $46.7 billion, from year-end 2006.

LCD subscribers can click here for full analysis and the following chart:

  • 10-Year Treasury Yield 

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